Erika Kauzlarich-Bird

29 posts tagged with For-Sellers:

According to CoreLogic’s latest Home Price Index,
prices appreciated by 6.9% year-over-year from December 2016 to
December 2017 on a national level. This marks the fifth month in a row
with at least a 6.9% increase.

Dr. Frank Nothaft, Chief Economist for CoreLogic, gave insight into the reason behind the large appreciation,

“The
number of homes for sale has remained very low. Job growth lowered the
unemployment rate to 4.1 percent by year’s end, the lowest level in 17
years. Rising income and consumer confidence has increased the number of
prospective homebuyers. The net result of rising demand and limited
for-sale inventory is a continued appreciation in home prices.”

This is great news for homeowners who have gained nearly $15,000 in equity
(on average) in their homes over the last year! Those homeowners who
had been on the . . .

Just
like with any product or service, the law of supply and demand impacts
home prices. Any time that there is less supply than the market demands,
prices increase.

In many areas of the country, the supply of homes for sale
in the starter and trade-up home markets is so low that bidding wars
have ensued, and the busy spring-buying season is just around the
corner.

CoreLogic recently conducted an analysis on national home prices at the time of sale for their January 2018 MarketPulse Report and found that a third of homes sold for at least list price.

“The
share selling above list price was almost three times the trough in
January 2008 and represented more than one-fifth of total sales.”

Many
markets in the western part of the country and around major cities are
experiencing higher shares of homes selling above list . . .

In
today’s housing market, where supply is very low and demand is very
high, home values are increasing rapidly. Many experts are projecting
that home values could appreciate by another 4% or more over the next
twelve months. One major challenge in such a market is the bank
appraisal.

When prices are surging, it is difficult for appraisers
to find adequate, comparable sales (similar houses in the neighborhood
that recently closed) to defend the selling price when performing the
appraisal for the bank.

Every month in their Home Price Perception Index (HPPI), Quicken Loans measures the
disparity between what a homeowner who is seeking to refinance their
home believes their house is worth and what an appraiser’s evaluation of
that same home is.

It
is common knowledge that a great number of homes sell during the
spring-buying season. For that reason, many homeowners hold off on
putting their homes on the market until then. The question is whether or
not that will be a good strategy this year.

The other listings
that do come out in the spring will represent increased competition to
any seller. Do a greater number of homes actually come to the market in
the spring as compared to the rest of the year? The National Association of Realtors (NAR) recently
revealed the months in which most people listed their homes for sale in
2017. Here is a graphic showing the results:

The three months in the second quarter of the year (represented in red) are
consistently the most popular months for sellers to list their homes on
the market. . . .

CoreLogic’s latest Equity Report revealed that “over the past 12 months, 712,000 borrowers moved into positive equity.” This
is great news, as the share of homeowners with negative equity (those
who owe more than their home is worth), has dropped more than 20% since
the peak in Q4 of 2009 (26%) to 4.9% today.

The report also revealed:

The average homeowner gained approximately $14,900 in equity during the past year.Compared to Q3 2016, negative equity decreased 22% from 3.2 million homes, or 6.3% of all mortgaged properties.U.S. homeowners with mortgages (roughly 63% of all homeowners) have seen their equity increase by a total of $870.6 billion since Q3 2016, an increase of 11.8%, year-over-year.

The map below shows the percentage of homes by state with a mortgage and positive equity. (The states in gray have insufficient data . . .

Over
the next five years, home prices are expected to appreciate on average
by 3.35% per year and to grow by 24.34% cumulatively, according to Pulsenomics’ most recent Home Price Expectation Survey.

So, what does this mean for homeowners and their equity position?

As
an example, let’s assume a young couple purchases and closes on a
$250,000 home this month (January). If we only look at the projected
increase in the price of that home, how much equity will they earn over
the next 5 years?

Since
the experts predict that home prices will increase by 4.2% in 2018, the
young homeowners will have gained $10,500 in equity in just one year.

Over a five-year period, their equity will increase by nearly $45,000! This
figure does not even take into account their monthly principal mortgage
. . .

We
often talk about the financial reasons why buying a home makes sense.
But, more often than not, the emotional reasons are the more powerful or
compelling reasons.

No matter what shape or size your living
space is, the concept and feeling of home can mean different things to
different people. Whether it’s a certain scent or a favorite chair, the
emotional reasons why we choose to buy our own homes are typically more
important to us than the financial ones.

1. Owning your home offers stability to start and raise a family

From
the best neighborhoods to the best school districts, even those without
children at the time of purchase may have this in the back of their
minds as a major reason for choosing the location of the home that they
purchase.

According to CoreLogic’s latest Home Price Index, national
home prices have appreciated by 7.0% from October 2016 to October 2017.
This marks the second month in a row with a 7.0% year-over-year
increase.

A lack of supply of homes for sale has led to upward pressure on home
prices across the country, especially in areas where both existing and
new home inventory have not kept up with buyer demand.

CoreLogic’s Chief Economist Frank Nothaft elaborated on the significance of such a large year-over-year gain,

Single-family residential sales and prices continued
to heat up in October. On a year-over-year basis, home prices grew in
excess of 6 percent for four consecutive months ending in October, the
longest such streak since June 2014.

This escalation in home prices reflects both the acute lack of supply and the strengthening . . .